Remember the united euphoria that Indians experienced on ISRO’s Chandrayan-3 touching the soil on the Moon’s South Pole on August 23 this year? The joy and the glee that everyone witnessed and the pride that was so palpable hinted at one inescapable fact – that the success achieved is not the result of a day’s work but took years of careful planning, resolute determination, multiple failures and the intent to stay put in the face of misplaced criticism by the naysayers.
The world is taking notice of this extraordinary accomplishment while realising how scientific achievements are not limited to genius minds alone. Even a common man can procure and secure only if he has a plan in place and is very much willing to stay strong in the face of adversities. This formula to succeed applies to everyone and everywhere including our savings and investment behaviour which is essential to ensure financial security in the long run.
The common man must look at why we succeeded rather than merely how we succeeded. There are factors so similar to successful investors’ investing journey that one is forced to gauge some essential investing mantras from ISRO’s journey to planting India’s footprints on the moon.
Be prepared for the long haul
The achievement of Chandrayaan-3 stands as a significant milestone for India, underscoring the relentless dedication and hard work of ISRO scientists. It represents a pivotal moment in India's enduring commitment to space exploration, a journey that spans decades.
In 2008, the launch of Chandrayaan-1 marked India's maiden mission to orbit the moon, a resounding success that paved the path for Chandrayaan-2's launch in 2019. While Chandrayaan-2, too, achieved success, its intended moon landing did not go as planned. Nevertheless, the valuable lessons drawn from Chandrayaan-2 were instrumental in shaping the success of Chandrayaan-3.
Chandrayaan-3 represents a significant stride in India's space exploration program, serving as a testament to the indispensable role of long-term planning and unwavering perseverance in achieving triumphs in the realm of space exploration.
Accumulating wealth resembles a marathon rather than a sprint, necessitating the investment of time, dedication, and self-discipline. Much like the Chandrayaan-3 mission, this journey may encounter obstacles, but by maintaining your concentration and persistently advancing, you will ultimately reach your desired destination.
Listed below are the fundamental principles of wealth accumulation:
Commence early: Initiate your savings and investments as soon as possible, as the earlier you begin, the more time your funds have to flourish.
Consistent saving: Even if you can only allocate a modest sum each month, its cumulative effect over time is substantial.
Prudent investing: Given the array of investment choices available, it is crucial to conduct thorough research and select investments that align with your financial objectives.
Patience: The stock market's fluctuations can be unpredictable, necessitating a patient approach, steering clear of panic when markets take a downturn.
Goal orientation: Prompt results might not always be apparent, but maintaining focus on your goals and persistently working towards them is vital.
Staying persistent is important
The triumph of Chandrayaan-3 serves as a testament to the enduring value of a patient, long-term approach. It entailed numerous years of unwavering commitment and diligent effort from ISRO scientists to ultimately realise this monumental achievement.
This parallel extends to the realm of wealth creation. Building wealth is a process that demands time, persistent effort, and unwavering discipline. Although setbacks may arise during the journey, maintaining unwavering focus and continuous progress is the key to eventually reaching your financial objectives.
Further insights into the analogy between Chandrayaan-3 and wealth creation:
Clear vision and planning: In both cases, a crystal-clear vision coupled with a meticulously crafted plan is essential. ISRO scientists possessed a well-defined vision of landing a spacecraft on the moon and formulated a detailed plan to make it a reality. Likewise, investors must define their financial objectives clearly and devise a strategic plan to attain them.
Perseverance and resilience: The Chandrayaan-3 mission encountered its share of challenges, yet ISRO scientists displayed unwavering perseverance and resilience, ultimately achieving success. Similarly, investors will encounter setbacks during their journey, but they must remain resilient and continue to progress.
Long-term perspective: Just as Chandrayaan-3's mission spanned many years and will yield enduring benefits; wealth creation necessitates a long-term outlook. While it demands time and sustained effort, the potential rewards for prudent wealth-building can be substantial and lasting.
Be prepared for emergencies
ISRO implemented a “failure-oriented design” approach, giving precedence to anticipating potential failure scenarios to fortify the mission against challenges and ensure a secure and triumphant landing.
ISRO chairman S Somanath explained, “We have also made sure that if two of the engines don’t work this time also, it will still be able to land. So the whole design has been made to make sure that it should be able to handle many failures, provided the algorithms work properly.”
Being prepared for unexpected life events is of utmost importance. To safeguard your financial well-being in times of uncertainty, consider the following strategies:
Emergency fund: Establish an emergency fund, which is essentially a dedicated savings account to cover unforeseen expenses such as job loss, medical emergencies, or unexpected car repairs. The ideal amount to have in your emergency fund varies based on your income and expenses, but a general guideline is to aim for three to six months' worth of living expenses.
Health insurance: Health insurance is a crucial safeguard against the costs associated with medical care, including doctor's visits, hospital stays, and prescription medications. While it may come with a price tag, it can prove invaluable when you require medical attention but lack the funds to cover it.
Life insurance: Life insurance provides a death benefit to your beneficiaries upon your passing. It serves as a means to offer financial security to your family or settle outstanding debts and financial responsibilities.
Selecting the appropriate insurance policies is vital. There are various insurance options available, so thorough research and policy comparisons are essential before making any decisions. Beyond insurance, there are additional measures to protect your financial well-being during emergencies:
Debt repayment: Reducing or eliminating debt is critical in ensuring financial resilience during challenging times. Focusing on paying off outstanding debts promptly can alleviate financial burdens.
Budget creation: Developing a budget enables you to monitor your income and expenditures, offering clarity on where your money is allocated. This helps you avoid overspending and allocate funds for unforeseen circumstances.
Automated savings: Implementing automated savings involves setting up regular transfers from your checking account to your savings account. This effortless method promotes saving without requiring constant attention.
By adopting these proactive steps, you can fortify your financial stability and be better prepared to navigate unexpected events that may arise in life.
Benefit from the compounding effect
Chandrayaan-3 employed a unique approach to reach the moon, differing from the methods used by spacecraft from other nations such as the US and Russia. Instead of a direct trajectory, it leveraged the Oberth effect by initially orbiting Earth in an elliptical path. During its closest approach, the spacecraft harnessed the increased velocity to efficiently propel itself into the moon's orbit. The Oberth effect, a fundamental concept in space travel, states that propulsion system efficiency rises with greater speed within a gravitational field. Chandrayaan-3 ingeniously harnessed gravity's power, ensuring a cost-effective and efficient lunar journey.
The Oberth effect draws a parallel to the concept of compound interest. In a similar vein, compounding plays a pivotal role in accumulating wealth. When interest is earned not only on the initial principal but also on previously earned interest, wealth experiences exponential growth over time. This compounding phenomenon fosters accelerated wealth accumulation as earned interest generates further interest, propelling financial growth.
Know the risks involved
Achieving a soft landing on the moon stands as a critical and formidable task, demanding meticulous planning and precise execution. Likewise, retirement planning is a vital undertaking, necessitating careful preparation and thoughtful implementation.
Both soft landings and retirement planning share a common objective: To mitigate risk and ensure a seamless transition. In the context of lunar landings, the risk pertains to the possibility of the spacecraft crashing. In retirement planning, the risk revolves around the potential of depleting your financial resources.
To minimise risk in both scenarios, several strategies can be employed. For soft landings, these include the utilisation of advanced landing gear, as exemplified by Chandrayaan-3, and precise control during descent. In retirement planning, risk reduction involves saving an adequate amount of money, making prudent investments, and establishing a well-structured budget.
Another noteworthy parallel between soft landings and retirement planning is the imperative of adopting a long-term perspective. Both endeavours demand time and dedication for successful execution. If you're nearing retirement, initiating the planning process promptly is crucial. This affords you the necessary time to accumulate sufficient savings, make astute investment decisions, and construct a comprehensive budget. Such measures will aid in averting overspending and ensure you have the financial means to sustain your retirement years comfortably.
By dedicating the effort and time to plan for retirement, you can facilitate a seamless transition into this life stage and enjoy a financially secure retirement.
A scientific bent of mind ripples with the same arguments and has the same concerns as the financial world. A close look at both worlds will underline similar tenets that will help you understand how working on your finances for the coming two to three decades of your life is not much different from the continued and recurring scientific innovations over a long period.
